In 2008, for the first time in history, most of the world’s people will be living in cities. Like it or not, we are living in an urban age in which rapid change in the environment, economy, population and the physical condition and systems of urban places threatens to outpace our ability to manage change.

The first major shift has been a shift in the nature of the urban economy.

The year 1957 was a milestone for urban Canada because a majority of Canadians still made their living from manufacturing and two-thirds of us lived in cities. Some 50 years later, another significant milestone was passed. Now, 80 per cent of us live in cities and the majority of new jobs are not manufacturing but creative jobs in science, technology, design, culture, and financial and professional services.

Yet cities are still zoned and planned for an industrial economy. The biggest single shift in the way cities were organized as a result of industrialization was the separation of where we live from where we work. The new economy is the opposite: We now live and work in the same place. In fact, for many of us, work is wherever we can access the Internet.

Even the feverish attempt to legislate and protect employment lands in urban Ontario is fraught with contradictions. Protecting abandoned sites in the hope that manufacturing jobs will return is a pipe dream. In fact, dreaded high-density condo developments â€“ when designed properly â€“ can be hives of activity for small businesses. I have friends who run significant businesses out of their second bedroom, 20 floors above street level. We don’t understand, nor have we mapped, the new urban economy, so can’t even come close to understanding what is happening with employment. So zoning for it is impossible.

Provincial trade barriers hobble the shift from national industrial economies to a global network of regional urban economies where the source of wealth generation has evolved from production to innovation. The bent in Ottawa toward managing the separate sovereignties of the provinces and relegating urban issues solely to provincial governments has left Canada without national urban strategies and resources that most federations like the United States have developed to rebuild their cities.

Our tax systems, trade policies, zoning and infrastructure polices are still designed for the industrial economy and, as a result, are failing to deliver the economy Canadians deserve or to minimize the downshift from manufacturing-centred cities.

The second huge shift for cities will be in the deterioration of our natural environment.

The effects of the accelerating pace of climate change, loss of biodiversity and a deteriorating environment affecting food supplies, water, energy, infrastructure and the livability of cities are not well researched. The urban challenges of climate change will be significant. All the elements we need to maintain our quality of life will be dramatically impacted by climate change and the efforts to reduce greenhouse gas emissions. Canada and Canadians cities have no concept of how to adapt to a rapidly changing climate. As the price of oil touches $100 a barrel, we may have reached a tipping point.

Massive investments in new, clean energy, a reorganization of where we live and work, a shift to transit- and pedestrian-centred development will involve a rethink of the fundamentals of city building.

The third major challenge is a change in the mix and age of the urban population.

An aging population, increasing diversity and growing pressures from immigration as people flee global crises in the environment, pandemics and conflict will become more acute in the coming decades. They will all lead to increased migration from the impoverished parts of the planet and greater demands on countries like Canada to accept more immigrants.

The globalization of our cities is mirrored by the diversification of the Canadian urban population. Over the next century, many of our cities will be as Asian as European, and with that will come new challenges and opportunities in the way we build and sustain cities that are culturally, religiously and ethnically complex communities.

Open, fluid cities that can absorb people quickly into the fabric of life and facilitate the mobility that members of these diverse communities crave into civic leadership roles will be crucial. It will require a shift in thinking and policy to realize diversity as a cause for celebration not merely accommodation. Cities that can include people and project open systems of governance and economic participation will have a significant strategic advantage.

At the same time, the demographic shift in Canada is from a youth-centred to senior-centred population.

The aging population will create increasing demands for new design standards and the popularization of universal design principles and other barrier-free spaces.

Home care, policing, barriers to physical mobility, property tax relief for people on fixed incomes and paramedic services will likely become greater issues in local municipal elections as seniors who vote in larger numbers than other age groups exercise their franchise disproportionately to their actual numbers in the low voter turnout world of municipal politics. In less than 25 years, seniors will account for more than one in four urban dwellers.

The retention and re-engagement of older people in the workforce will likely emerge as a challenge to both the culture and organization of the workforce. The continuing shift to a creative, knowledge economy using “plug and play” technology allows for the participation of workers who are not highly physically mobile or have limited physical strength. In the new economy, the focus will be on thinking and imagining rather than manufacturing.

The deficits in the fiscal and governance capacity of cities and the consequent decline in the quality of place will trigger problems with our urban systems, infrastructure, civic pride and democracy in urban centres. While the federal and provincial governments keep announcing their commitments to public infrastructure, they almost never frame total infrastructure spending by all orders of government against the magnitude of the deficit.

The backlog of repairs on streets is now in excess of $120 billion; the deficit is still growing by at least $3 billion a year and no national plan or combination of federal, provincial and municipal spending is yet even closely sufficient to close the infrastructure gap in any part of the country. The lack of autonomy, tax choices and the extreme overdependence on already high property taxes of Canadian municipalities will result in a significant decline in the built environment of our cities before there is any action.

The infrastructure deficit will become for the next generation of Canadians a worse and more challenging problem than the fiscal deficit was for the last generation.

The issue of infrastructure repair and maintenance debate we are still having in Canada is yesterday’s issue. Global cities are developing information technology, wired and wireless technology zones and systems, cultural regeneration zoning and taxation systems that support private development of great public spaces, as well as fiscal tools for making infrastructure investments self-financing rather than relying on the tax base.

Infrastructure has become both a bigger idea than roads and sewers and is being seen more and more as an investment with a rate of return than a cost centre. The new test of sustainability is to build infrastructure that supports higher levels of density, improves the tax base and generates more economic activity over time than the cost to create it.

Rapid transit development in the GTA may be the strongest economic development tool the region has and if used smartly will shift public transit from the perception it creates a tax burden to a real builder of the region’s tax base.

In a very real sense, the pace of change can only be met by seeing every decision we make in city building through a new integrated lens.

A bridge or a light-rapid-transit line â€“ or any infrastructure, for that matter â€“ is a cultural investment. Its beauty or ugliness, the inclusion of art and design, will define the living culture and impression of the city in which it is built more than what is on the walls of the local gallery because it becomes the everyday cultural experience of the commuter and the identity of the community.

Transportation infrastructure choices are environmental and economic assets because they result in different levels of energy use, air quality, land values and tax revenues and allow different levels of density and economic activity.

They are social assets in that they facilitate the participation in society and the affordability of mobility and access to employment.

Having a bigger view of the world and what we build is essential to keeping up with the accelerating pace of change in the economy, environment, culture and population. We have the will, the ability and technology and now we just need the leadership and vision to realize the potential of our cities.